WORKMEN'S 
COMPENSATION 


Delivered by 
HENRY W. BULLOCK, 


Chairman of the Workmen’s Compen- 
sation Commission of Indiana, Before 
the Indiana Bar Association, July [0, 
1913. 


FIVE CENTS. 





UNION PRINTING COMPANY 


fades uh lengclb 
INDIANAPOLIS, IND. 





WORKMEN’S COMPENSATION COMMISSION OF 
INDIANA. 

The General Assembly of Indiana at the sixty-eighth regular 
session (Acts 1913, p. 897) provided for the appointment of a 
commission to consist of five persons whose duty shall be to make 
inquiry relative to the causes, extent and liability of employers to 
employes for industrial accidents, the efficiency, cost, justice and 
defects of present laws relating to their compensation and to sub- 
mit their recommendations at the session of 1915. The commission 
is authorized to send for persons and papers, to administer oaths 
and examine witnesses and papers respecting such matters. The 
commissioners serve without pay except one member who is actually 
engaged in labor. The sum of $2,000 was appropriated for the 
necessary expense of such investigation. Governor Ralston ap- 
pointed the following persons as members of the commission: 


Henry W. Buttock, Chairman, WILLIAM GREENE, Secretary, 


Attorney-at-law, Indianapolis. I. T. U. No.1, Indianapenhs; 
Joun E. FrepericK, Kokomo, ALFRED M. OGLE, Terre Haute, 
Secretary Kokomo Steel and President Vandalia Coal Com- 
Wire Company. pany. 


CHARLEs Fox, Terre Haute, 
Secretary District 11, U. M. W: of A. 


CU 
WORKMEN’S COMPENSATION 


Delivered by Henry W. Bullock, Chairman of the Work- 
men’s Compensation Commission of Indiana, Before 
the Indiana Bar Association, July 10, 1913. 


Mr. Chairman and Members of the Indiana Bar Association: 

I wish to thank you for this invitation to address the Association, 
but after listening to the report of Mr. Harris and his committee, 
and reading their comprehensive report of a year ago, I am very 
much in the position of the smallest boy of three, who answered an 
advertisement for ‘“Boy Wanted.” 

The oldest boy told the would-be employer that he could clean up 
the office and do numerous other things which he enumerated. The 
second boy said that he could do anything that the oldest could do 
with a few additional things, which he named. When the smallest 

boy. was asked what he could do, he said: “I can’t do nothin’. The 
other fellers have done it all.” , 

Mr. Harris and his committee have done so much that [ am re- 
lieved of much of the burden. Governor Ralston has appointed a 
commission of five to study the cause and extent of industrial 
injuries, and to recommend some measure for their prevention and 
compensation. In this work we ask the hearty cooperation of the 

“Indiana Bar Association, as a body, and of all of its members as 
individuals, and as citizens of a State of no mean importance in the 
- industrial world. 
_ In social legislation Indiana has taken but little part for fitty years 
“or more, until the last few sessions of the legislature. Almost 100 
years ago Indiana was honored by having in her midst some of the 
»greatest educators of the world, the foremost leaders of industrial 
education, and the most renowned zoologist and geologist of their 
time. These educators came to our State at the solicitation of Rob- 
ert Owen, who, a hundred years ago, demonstrated to the world that 
industries can be conducted humanely and profitably at the same 
time. While Mr. Owen’s communistic theories did not succeed at 
New Harmony, yet his humane principles and educational policies 
were of untold blessing to our State, and the statues of two of his 
sons now adorn our State capitol, placed there by loving hearts as 
memorials to humanity in commercial life. 


When we consider that every year one coal miner out of every 
ten in Indiana is injured, one steel worker out of every five, and one 
railroad worker out of every twenty, with even/a greater proportion 
in some of the building trades, we can more nearly comprehend the 
social problem with which we must deal. Annually ten times as 
many laborers in the United States are injured, while in their various 
lines of duty, as were engaged both on the Union and the Con- 
federate sides in the battle of Gettysburg, and every year practically 
as many American workmen are killed in the line of their employ- 
ment as fell upon that field of valor and carnage fifty years ago. 
As these fatalities occur to workmen, whose average age does not ex- 
ceed thirty-five years, their families, and society as well, are deprived 
of thirty years of productive labor. While their families must suffer, 
society also will suffer in defective citizenship with low living stand- 
ards, or you and I must make this up through our contributions to- 
some social insurance fund, which will relieve the social shock now. 
borne by a few. Justice demands that all citizens be well paid and — 
cared for, and, if the wages received are not sufficient under all cir- 
cumstances to provide against want in every contingency, then they 
are not a living wage. 


We have been permitting employers and employees to deal with 
this question between themselves, without regard to the social signifi- 
cance which it embraces. From time to time, we have enacted em- 
ployers’ liability laws, which impose duties of compensation, or, 
rather, provided for causes of action for the misconduct on the part 
of employers or their servants. 

We have finally succeeded in abolishing the fellow-servant rule 
which Secretary Ireland said “was invented in 1837; Lord Abinger © 
planted it; Baron Alderson watered it; and the devil gave it increase.” 

These laws have been beneficial in that they secured payments in 
many instances to those seriously injured, but they have been found 
defective in that they do not provide for compensation in all cases of 
injury. Most foreign countries have gone further than we have, and 
have provided that in every case of disability there shall be compen- 
sation in proportion to the degree of the injury. 

There can be no argument brought against the theory that every 
man, who commits a private wrong on another, should pay the in- 
jured party. The employers’ lability laws are right in principle, 
but are insufficient to meet the situation. Society does not demand 
their repeal but their extension. The objections to these liability 
laws are to their administration rather than to their principle. We. 
must not confound a lability law with a compensation law or social 


s 


insurance measures. Liability laws deal only with misconduct and 
wrongs. Compensation laws deal with social and economic condi- 
- tions without regard to misconduct. The objections to the operation 
of liability laws can be summed up as follows: 

1, Only a small portion of injured workmen receive substan- 
tial compensation. Thus the standard of citizenship and of living is 
lowered, and the public is the sufferer. 

2. The system is wasteful, being costly to the employer, and 
to the state in maintaining courts, and to employees in their attorneys’ 
fees. 

3. The system is slow in operation. 

4. The operation of the law breeds antagonism between the 
employers and their employees. 

5. It throws the burden of suffering upon a few directly and 
upon society indirectly. 

Many foreign countries have gone beyond compensation for mis- 
conduct, and have provided social insurance reaching all classes of 
disability, and have provided systems of insurance whereby the 
many, who have profited, shall divide the burden with the few, who 
have suffered. Our Federal Government, in 1908, recognized this . 
principle, and enacted a law for the compensation of a part of the 
civil employees of the United States. This law, as finally extended, 
covers about one-fourth of the 400,000 civilian employees of our 
government. From August 1, 1908 to July 1, 1911, there were 
21,033 injuries reported regarding government employees, of which 
670 were fatal. Claims were made on 363 of these fatal injuries, 
and on 7,622 of the non-fatal cases and $960,000 was paid for the 
same and out of the Federal treasury. Thus 307 deaths and 13,104 
lesser injuries were not compensated for out of the public treasury. 

Senator Kern, of Indiana, has introduced a measure in Congress 
to provide for compensation in all cases affecting government em- 
ployees, either by disease contracted while in service, or from acci- 
dent received while in the line of duty. | 


EXTENDING LIABILITY WITHOUT NEGLIGENCE. 


I do not deem it necessary to discuss, at great length, the consti- 
tutional question of liability without negligence. Our laws have 
written into the contract of employment that an employer shall be 
liable for certain negligence of himself or of his employees, which 
inflict bodily injury to workmen. The laws have prescribed certain 
rules of conduct, which the employer and his servants must follow, 
and, if the violation of these rules causes injury to a workman, he 
may recover. This is as it should be. But there is a large number 


of industrial accidents—more than half, in fact—-where the con- 
duct of the employer is in strict accord with the law, and where he 
is guilty of no legal shortcoming. These injuries result from the in- 
herent hazards of industry—from the dangers which strictly adhere 
to and are a part of the industry itselfi—for which no one can be 
legally blamable. 


To my mind it is useless to discuss the academic proposition of 
compelling the employer to respond in damages, where he is guilty of 
no misconduct or negligence. Private wrongs or torts are person- 
al; but the injuries occurring from the inherent hazards of industry 
are not personal, and should be charged against the industry, as a 
whole, and not against the individual employer. 


Society, in its organized form, may adopt any law, rule or regu- 
lation it sees proper concerning property, life or liberty. It is only 
a matter of expediency whether or not it does this. Constitutions 
are adopted that these changes may not be radical, and that certain 


rights may be guaranteed as long as the constitution endures. All 


property rights are created by law, and can be destroyed or modified 
by law. All property is held, devised and conveyed only by virtue of 
statutory and constitutional laws. We have no vested rights in rules 
of law or conduct, except as society has spoken through constitutions. 
So, all laws regarding fellow-servants, contributory negligence, and 
assumption of risk may be modified at the pleasure of the legislature. 


The police power extends to all public needs, and it may be broad 
enough to cover the economic needs of industry. It has been de- 
cided, by the highest courts, that sometimes an ulterior public ad- 
vantage may justify the insignificant taking of property for im- 
mediate private purposes. Chief Justice Taney decided, in the 
license cases, that the police power is the power inherent in the 
government to govern men and things. It is a conceded proposition 
that, when property becomes affected with a public interest, it be- 
comes subject to public control. All law limits liberty, or individual 
action, but at the same time guarantees rights. Law may, in some 
manner, diminish property rights, but in some ways it also increases 
them by promoting the general welfare, and creating conditions and 
opportunities for its enjoyment. Property is governed by law for 
the convenience of the public as well as the owner, as street improve- 
ments are ordered and special assessments laid for the general 
welfare. 


There are examples where the State collects funds from a large © 


number of persons, by assessing a tax, and thus distributes the bur- 
den, and lessens the social shock. Among these examples are the 


(a) bank guarantee laws, (b) sheep-killing dog laws, (c) care for 
the unfortunate and tubercular, (d) taxing insurance companies for 
' the maintenance of fire marshals and injured firemen, etc. 

I am firmly convinced, however, that under our present constitu- 
tion the courts of Indiana must always be open for injuries done to 
the person of workmen, unless this right is waived by contract, and 
that the amount recoverable must be adequate for the damage sus- 
tained. In other words, there can be no compulsory compensation 
law in Indiana, which will deprive workmen of the right to bring 
action in court for private wrongs. However, laws may create con- 
ditions which will make it impossible for them to obtain employment 
unless they waive this right. 


Social insurance however, can be made compulsory by imposing 
an occupation tax on business or an excise on corporations for the 
right of doing business in their corporate capacity. This was decided 
by the Supreme Court of the United States in the cases involving the 
taxation of corporations. In fact great latitude has always been 
allowed in the imposition of occupational taxes either for revenue or 
regulation. If employers really desire a compulsory compensation 
law they can assist in the passage of such a measure as we believe 
it will be held valid. 


SOCIAL INSURANCE. 


We should not view this question as extending personal lability 
to cases without fault. We should consider workmen’s compensa- 
tion as a scheme of social insurance, the whole theory being that the 
cost of caring for the sick and injured in industries should be added 
to the cost of production, and borne by those who consume the 
articles produced by the unfortunate laborer. This shifts the propo- 
sition from that of the relation of, master and servant to the relation- 
ship of society to the producers of wealth and comfort. The in- 
genuity of man has developed complex machinery which has reduced 
the cost of production but has at the same time increased the waste 
of human life and limb. Society receives the benefit of the decreased 
cost and should bear the burdens of the increased waste, which cost 
should be added to the price of commodities and be distributed among 
the consumers of such commodities. Business conducted by em- 
ployers is not their business. Society demands certain commodities, 
and employs manufacturers and transportation companies to secure 
these commodities. Thus the employers are agencies employed by 
society, and society has the right to say how its money paid for com- 
modities shall be expended. Employers charge insurance rates 
against the consumer, and the consumer has a right to say how the 


price, which he pays for commodities, shall be expended for the com- 
mon good. It then becomes a question of how a community shall 
tax itself, and how we shall spend our own money so that we in our 
social organization shall receive the greatest benefit. 

Workmen’s compensation, or social insurance, in my mind, should 
not create a new relationship between master and servant by writing 
into the contract of employment new conditions, but, rather, should 
be a compact between the state, or society at large, and those who 
labor, so as to guarantee the care of those who labor as an economic 
necessity and social duty. It then becomes a social question, and*not 
a matter between employer and employee. 

Society demands coal, lumber, automobiles, and other commod- 
ities, and asks men to risk their lives to produce them. If we enjoy 
their comforts, we should fully pay for all the energy and sacrifice 
required for their production. In other words, the inherent hazards 
of industry should be borne by the community at large where thus 
produced, but the negligence of employers should be a personal 
proposition, for which an action at law can be maintained. We 
received by the few, so that the social shock would not be felt by 
society at large, through defective and inefficient citizenship of the 
should, by social insurance, distribute among the many the burdens 
afflicted, nor crime and ignorance of those immediately affected. 
This compensation should not depend on negligence or fault any more 
than the ordinary insurance policy. It should be a covenant to pay 
when the burden, falls on the workman, unless the injury is inten- 
tionally self-inflicted. 


PLANS OF COMPENSALION: 


Since the consumer, or the public at large, pays all of the expenses 
of production, the question is: How shall the community best tax 


itself to obtain the most efficient administration of the insurance 


fund? It is no longer a personal matter between employer and em- 
ployee. To say that a scheme allows the greatest liberty to the em- 
ployer is a condemnation for it, rather than an argument for its exist- 
ence. We have had liberty already, and it has brought dire results 
to the community. We must have regulation and control. 

We would have but little trouble in devising plans for the dis- 
tribution of funds to cover industrial disability if only the injured 
parties and the public were concerned, but through the operation of 
liability laws third parties have come into the arena. Insurance com- 
panies with their attorneys, agents and adjusters are in the field act- 
ing as buffers between employers and employees. They are writing 
practically $1,000,000 of insurance each year in Indiana and paying 


but a little more than $500,000 in claims. Their agents receive com- 
missions approximating $200,000 annually and their attorneys and 
adjusters similar sums. These agencies are working for profit and 
are crying hard against the loss of profits which should not be con- 
sidered in the solution of this problem. We also have another class 
of attorneys who handle personal injury cases for workmen and who 
in the aggregate receive perhaps $150,000 to $200,000 a year from 
injured workmen and their families. One line of work is as honor- 
able as the other and while one may chase the ambulance the other 
haunts the grave and often times ‘imposes upon the widows and 
orphans through deception and inadequate payments. ‘There is a 
margin of $700,000 to $800,000 wasted in handling the present fund 
and if our commission can devise plans to distribute this fund more 
economically and efficiently, we will have promoted the general wel- 
fare through the saving of waste. 

Workmen’s compensation laws provide for the distribution of 
the funds in the various states and counties as follows: 

1. By employers direct, or through their ‘insurers, without 
regulation, or controlled by the state. This is a most unsatisfactory 
method, as it allows a cunning adjuster of liability companies to im- 
pose on an ignorant workman, and permits him to plunder the orphan 
and widow. It has a tendency to curtail the sums paid to the work- 
men, and thus defeats the purpose of such laws, through the incentive 
to save money, by making the payments small. Some states have this 
plan, with a state board to hear appeals. 

2. In some States and countries the fund is distributed by 
mutual insurance companies controlled by employers. ‘This is almost 
as unsatisfactory as the first. Germany has this system, and fifty 
per cent. of the cases there are appealed, because the employers cut 
down the allowance to reduce their expenses. 


3. Some States and countries require the funds to be admin- 
istered solely by stock insurance companies. This method makes 
those financially interested the judge of their own cause. 

4. Other countries, and a number of the States, collect the 
funds through State agencies, and distribute the same through im- 
partial State boards. Ohio, West Virginia, Washington, California, 
Nevada, Oregon and a few other States, have adopted this plan of 
state insurance, in whole or in part, with success and have admin- 
istered an insurance fund for the benefit of injured workers with 
economy. The experiments worked out in these States will compare 
favorably with Germany and other countries where social insurance 
has been in existence for a longer number of years. 


While all compensation laws in this country are experimental as 
yet, the general tendency is towards state insurance as productive of 
the greatest social efficiency. A joint control of the funds by em-— 
ployers and employees has worked well in Germany, during the first 
thirteen weeks of disability. Under state insurance, the workmen 
receive all that the employer contributes. The element of profit is 
entirely destroyed. No workmen’s compensation law will work well 
where there is a tendency to make profit out of the misfortunes of 
others. The greatest objection to employers’ liability laws is, that 
the employers pay large sums, while the employees receive but a frac- 
tional part of the amounts so paid. 


As an example of the defects of our present laws, especially those 
governing liability insurance, is that of the Prest-o-Lite Company, of 
Indianapolis, which employed contractors to érect a concrete building. 
The building collapsed and many workmen were killed. The policy 
in the first place was to protect the employers against loss which they — 
would sustain or have to pay. The contractors became insolvent and 
nothing could be collected from them and not having to pay anything 
the surety company was not liable, besides the surety company claimed 
it had issued a policy to the firm as general contractors and that 
at this time they were doing concrete work. The owners may or 
may not be hable under the dangerous employment act of Ig11. At 
any rate, a large number of dependents were left, widows had to take 
to the washtub, the aged had to suffer and children were deprived of 
the advantages which otherwise would have been provided for them. 
There was a social shock not alone to the workmen and their families 
but to the community. Justice would dictate that insurance policies. 
should be issued for the benefit of the workmen if nothing more. 


Compensation could be provided with but little additional cost 
if the waste was out of the transaction and workmen received all that 
the employers pay. In 1911 there was more than $35,000,000 col-— 
lected for liability insurance in the United States, $20,000,000 of 
which was paid in losses. Probably $8,000,000 of this was paid in 
attorney fees by workmen, leaving not more than $12,000,000 to go 
to the actual relief of the injured. Some of the companies writing 
this insurance are foreign corporations who began in this country by 
a loan or deposit of $200,000 to the American branch. These loans 
have been repaid many times and these foreign companies really have 
nothing invested in this country, but in I9gII on no investment one 
of the companies received from the American branch $565,000, an- 
other $153,000, another $96,000, another $63,000. This money was 
taken either from the workmen through decreased wages, from the 


employer through the reduction in dividends or from the consumer 
in an increase in price of products. In any event it lessened the com- 
forts of the American people. 


Where workmen receive all that the employers collect the price of 
commodities is not enhanced in any material degree as wages con- 
stitute only about one-sixth of the price of products. Liability rates 
are usually calculated on the payroll. In Indiana we pay as much 
for liability insurance as the Ohio people do for compensation, as in 
that State the employers pay a certain percentage on their payroll 
based on the hazard of the industry. In Indiana the liability rate 
on structural iron work is $10.50 on the $100 of payroll, in Ohio 
the compensation rate is $6. In Indiana the liability rate on con- 
crete work is $5.60 while in Ohio the compensation rate is $4. 
In electric light work in Indiana the rate is $5.25, in Ohio the com- 
pensation rate is $3.10. In shoe factories in Indiana, the rate is 
35 cents to the $100 of payroll; in Ohio it is 45 cents. While knitting 
mills in Indiana pay 42 cents and in Ohio 30 cents. Shirt manufac- 
turers pay 21 cents in Indiana and 20 cents in Ohio. Publishers in 
Indiana pay 35 cents on every $1.00 of wages paid in the production 
of books and 30 cents in Ohio. Thus lawyers pay 35 cents to every 
$100 of wages paid od 35 cents to every $600 worth of books pur- 
chased. Even if this rate would be doubled or tripled, the price of 
law books would not advance to any perceptible degree and even at 
that we would have the pleasure of knowing our books were not 
printed in blood or bound in tears. | 


The element of profit should not be considered in workmen's com- 
pensation any more than in conducting our courts, operating 
our schools or caring for the sick and afflicted. We might as well 
turn our courts and schools over to private agencies as to permit 
private agencies to administer a social insurance fund. The private 
agency would conduct our government with a view of profit, rather 
than efficiency, just as our utility companies have often at- 
tempted to do at various times to have a wide margin between a 
maximum of charges and a minimum of service. We do not want 
the service of our courts, schools and administrative agencies skimped 
in efficiency. We want service for every dollar, but our first con- 
cern is service. Private agencies might employ our judges at a. 
lower salary and our teachers for lower wages or they might conduct 
schools in competition with our State schools, but that would not be 
an argument for privately conducted government. We would not 
even turn the collection of taxes over to a saving bank or permit 
them to say in what manner our public funds should be administered. 


We pay the bills in the end and must decide how they must be paid. 
The question is not how little can we pay the workman or compel 
him to take, but what he is entitled to and what is the best for the 
common welfare. | 


No man can be a judge of his own cause, and when an employer, 
a mutual or stock company is permitted to decide how much a work- 
man is entitled to, whether he received the injury in the course of his 
employment, how long he will be disabled and the percentage of his 
disability, the judge and paymaster are one and the same person and 
the judge immediately turns financier and attempts to cheesepare the 
amount to be paid and there is strife and contention the same as 
under existing laws. Laws which permit such settlements are noth- 
ing more than liability laws which limit the amount of recovery and 
tie the hands of workmen so that there will be no recovery in the 
courts. We are told we must abolish waste. If this is true, we 
must abolish dividends, premiums and commissions of insurance 
companies and their agents and we must abolish the fees of their 
attorneys. These are wastes just the same as the contingent fee of 
the attorney for the workman. 


Some welfare and pension schemes of employers are devised for 
the purpose of preventing compensation and as an insurance against 
strikes and demands for better living conditions. They should be 
regulated by law so that workmen have some vested rights and will . 
not be placed in a position where their employment and accident 
funds will be hazarded in case they seek what is just. The funds 
provided for compensation and welfare schemes are produced by the 
labor of the workmen and are consequently withheld from their 
wages. If they were not produced by the workmen, they would not 
be in existence. The state should control their distribution and pro- 
vide for their security. This should not be left to the whim of em- 
ployers, however generous some may be. They are only human and 
having power to discharge employees, some may at times hold the 
possible loss of position, benefits and pensions over. the heads of . 
workmen like Dionysus suspending the sword over the head of 
Democles. An ever-present menace of the strong having the power 
to withhold subsistence from the weak, is incompatible with either 
civil or religious liberty. Hamilton well said, “In the general course 
of human nature the power over a man’s subsistence amounts to a 
power over his will.”’ We can have no liberty, political or otherwise 
when workers depend upon the arbitrary will of employers for their 
existence during days of misfortune. If the popular will of the 
nation requires a constitution as a safe-guard against turbulence and 


passion, it 1s equally true that some security should be provided 
against passions and human weakness in industry. 


I once noticed a small boy go to a butcher shop with a bench 
legged bulldog. I thought it was a useless animal. When he re- 
turned with a large piece of liver a hound attempted to share it with 
him by taking the larger part. The bulldog played an important 
part. As long as we have the hungry adjusters and attorneys of the 
insurance companies, the injured workman is entitled to his bulldog. 
We should attempt to create a condition where both classes of ani- 
mals will become useless and the workman will be protected by an 
impartial administrative board, the same as he is supposed to be pro- 
tected in the streets and at his fireside. Profits in administering this 
fund are incompatible with the very idea of social service and eco- 
nomic justice as profits are charges and must necessarily be taken 
from the wages of the worker who with his family must suffer, or 
taken from the consumer in the way of increased price and this adds 
to the high cost of living and social want. 

The fund created for social insurance should be collected from 
the employer as a source or agency as he is enabled to pass it on to 
the consumer by adding it to the price of the commodity and thus 
distributing the cost among the large number of consumers. It 
should not be taken from the wages of the worker as it would lower 
the living condition of our State and would be adding burdens to 
those engaged in hazardous industries instead of decreasing those 
burdens. We should not take premiums from workmen in danger- 
ous employment. The theory of the law heretofore has been that 
dangerous employment should pay higher wages, but as this accident 
rate is the greatest it would be decreasing the income of workmen 
injured in hazardous employment more than those in any other in- 
dustry. The employers do not pay these premiums. In all contracts 
and business, insurance rates are estima: ed as a part of the overhead 
expense and in the constriction of bu idings all contractors make 
these estimates and landlords fix the reats according to the cost of 
construction and tenants pay the bill. 


Any law which may be drafted or enacted should provide ample 
relief and should not be formed on lines to save money at the ex- 
pense of the common welfare. Most of the so-called compensation 
laws are a disgrace to this country. When it comes to paying a 
workman $150 to $200 for the loss of an eye or a limb, we have 
introduced European living conditions in the community where 
American dividends prevail. Sixty to 85 per cent. of all injuries are 
of less duration than two weeks and a law which exempts payment for 


the first two weeks of disability and then gives only one-half wages 
for a period of from three to five years, is an ingenious scheme to 
defeat compensation and a plain illustration of how not to do justice. 
I know of the case of a coal miner who has been blind for twenty- 
seven years, another who has been disabled for thirty-three years and 
a law which gives compensation in a limited manner for five or six 
years for permanent disability is a disgrace to any State and is not as 
efficient as our employers’ liability laws. I have in mind two cases 
where children were born after their bread winners were fatally 
injured. A law which would allows a limited compensation for five or 
six years and leave them helpless during the period when their char- 
acter 1s forming would be unworthy of our State. The law should 
be so formed that it will not raise the price of commodities beyond 
those produced in other States. Otherwise in the competition that 
exists wages would have to be lowered, or profits reduced in order to 
meet competition of articles produced in States that are less liberal 


and just, but we need have but little fear as the rate on manufacturing | 


establishments is so small that it would add very little to the cost of 
any commodity. 


The main object sought is to prevent industrial accidents and dis- 
ablements. We are so constituted that our mind travels along the 
line of least resistance and where there is no penalty, the employer is 
apt to conduct his business without safeguards and without due care. 
That has always been the history of industry. If there is resistance 
in the way of penalties, greater care will be exercised and where 
employers are liable to respond in damages for the disregard for 
safety appliances, there will be fewer accidents and the insurance 
rate on each industry will be less. It is to the interest of the care- 
ful employer that the negligent ones should be subject to such actions 
as penalties, so that the accident and insurance rates can be kept at 
the lowest possible point. 


It might be best to have our Bureau of Statistics consolidated with 
the Bureau of Inspection so that the department which gathers infor- 
mation regarding our industries can classify the same that there shall 
be no duplication of services and it might be the best that the De- 
partment of Inspection be changed to a department of labor or an 
industrial commission under the management of three or five per- 
sons who can make the necessary inspections, distribute the insurance 
fund, investigate accidents and the extent thereof and at the same 
time can give instructions on the better sanitation and conduct of 
industries. In this way there would be no duplication of service for 
with the increased number of inspectors, which are even now neces- 


sary, an insurance fund for the benefit of workmen could be handled 
efficiently and with less expense than our courts are now handling 
accident cases and a large amount of the $500,000 spent annually 
to maintain our courts and juries could be saved, as a large percentage 
of it is spent on account of litigation regarding personal injuries. 
In States where the insurance fund is collected and distributed 
through the agencies of the State there are boards of award or com- 
missions composed of three or more members and a sufficient staff 
to make inspections and handle the funds. Indiana should do noth- 
ing for herself of less consequence than this. The most just and 
effective plans should be chosen, that excessive rates may not be 
charged against employers, that amounts due workmen should not be 
withheld from them, that our industries should not be the prey of 
corporations organized for gain, but that the moneys collected from 
the consumers should all be spent in our state, not to enrich foreign 
treasuries. Any measure which is an improvement over our present 
laws must provide for the elimination of waste and profit to dis- 
tributing agencies, must obviate delay, must provide security for the 
deferred payments of the compensation and must provide some State 
board without financial interest in the fund to administer it. If it be 
objected that this State board would be a political agency, we would 
show that our State institutions, schools and affairs are very well 
managed and when our State employees are free the yare usually em- 
ployed by insurance companies either: as solicitors, adjusters, at- 
torneys or managers, so that the employes of insurance companies 
are the same men who have served the State and are no better. Men 
under oath and bound to the state to decide controversies according 
to their duty are more apty to judge justly than when under the em- 
ployment of one of the parties to a cause, with their employment de- 
pending on how they decide and the salary they receive upon the 
amount they retain from workmen upon whom they sit in judgment. 
The efforts of casualty companies to convince the public that twenty- 
five per cent. of injured workmen “malinger’”’ during the adjustment 
of causes, is an unwarranted effort to prejudice the case in the “court 
of public opinion” and their present efforts to extend the period for 
which no payments are to be made during disability are conclusive 
arguments against making them the judges of their own cause. They 
have recently filled our magazines with warnings against the success- 
ful efforts of the German people to care for their workmen through 
vocational training and social insurance. These systems are satis- 
factory to the employers of Germany but are meeting the opposition 
of American casualty companies because they are administered with- 


out profit for them, and they are fearful that the American States — 
will institute the same efficient, economic and comprehensive schemes 
in this country on a practical basis without giving Shylock a chance 
to take his pound of flesh and the blood from the American people. 
Montesquieu says, “Constant experience shows that every man in- 
vested with power is apt to abuse it and carry his authority as far as 
it will go.’ Hence companies organized for gain should have no 
authority to sit in judgment in matters which affect their income. 
Our Parcel Post and the federal Compensation Law are examples 
of efficient public service. . 

The problem before our commission is that of choosing some 
plan to distribute the social insurance fund economically and with 
the best results for the common good. Whether we should select 
one method or a combination of methods is yet to be determined by 
our commission and the people of the State. Much will depend on 
the intelligence and earnestness of our citizenship and much will de- 
pend on the lobby employed by financial interests and foreign capital 
to control the Legislature. We have met with this opposition before. 
The American Association for Labor Legislation is favoring meas- 
ures to report occupational diseases and injuries. Such a measure ~ 
was defeated last Legislature by lobbyists on the theory that it would 
give ambulance chasing lawyers information regarding accidents. 
Hours cf exposure and fatigue increase industrial accidents, yet we 
met with lobbyists who opposed the reduction of hours of labor for 
women and children on purely selfish ground and in that way, the 
undesirable conditions of Indiana have been greatly increased. We } 
trust that the president of the Indiana Bar Association will appoint a 
committee to assist us in counteracting the baneful influence of lob- 
byists who put their purse before their patriotism. Mr. Harris and 
the late John T. Dye have rendered great service to the State by their 
unselfish labor. I have met with them a number of years before 
legislative committees working for measures for the common wel- 
fare. Having reached the topmost round of their professional lad- 
der they have given the people the benefit of their useful and valuable 
experience. Mr. Dye will be greatly missed in this constructive 
work. We trust that the committee appointed will be men of such 
high character that their service will be for the common good and not 
tor their special clients, that their opinions will be controlled by their 
conscience, not by their retainers, that we may succeed in having #m 
enacted some measure which will reduce industrial calamities, im- 
prove the living conditions of workmen and efficiency of our citizen- 
ship. 





